The federal government decided not to extend the fuel tax reduction granted by former President Jair Bolsonaro (PL) in the election year. The decision was confirmed this Monday (27) by the Ministry of Finance, after a day of meetings between high-ranking members of the government of President Luiz Inácio Lula da Silva (PT).
With the end of the exemption, the Union will once again collect around R$ 29 billion in taxes on gasoline and ethanol. The resources strengthened the new government’s effort to reinforce public coffers to fund investments and social programs.
The return of federal tax collection, however, tends to make both fuels more expensive for consumers as of Wednesday (1st). A liter of gasoline, which costs an average of R$ 5.07 in the country, can go up to R$ 0.70. Ethanol, which costs BRL 3.80, may rise by BRL 0.24.
These increases, however, depend on the end of fuel stocks at service stations and also on the full transfer of the reencumbrance through the supply chain. It also depends on the resumption of full tax rates, which is yet to be confirmed.
The new government stated that it intends to charge lower rates on ethanol – a less polluting and renewable fuel. On the other hand, it should start charging more taxes on gasoline – a fossil fuel that pollutes more.
electoral solution
The fuel exemption was granted by then-president Jair Bolsonaro (PL) in his last year of government with the aim of containing the increase in fuel prices. At that moment, Bolsonaro was trying to hold back the increase in these products to gain strength in the electoral race without having to change Petrobras’ price policy.
Bolsonaro decided that the exemption would end in 2022. Lula took office on January 1 of this year. To prevent fuel prices from rising the next day, he edited a Provisional Measure (PM) extending the exemption until February 28 – that is, Tuesday.
Haddad always defended that the exemption was not extended. For him, the money would be needed for investments, payment of Bolsa Família, for Minha Casa Minha Vida.
On the other hand, people close to Lula, such as PT president, deputy Gleisi Hoffmann, defended maintaining the discount – at least for now. According to her, the price increase resulting from the end of the discount would punish consumers.
For Gleisi, the ideal is that the exemption is maintained at least until April. This month, directors and counselors appointed by the new government at Petrobras should take office. The state-owned company’s pricing policy could then be revised. As a result, the prices charged by it fell, making room for the return of the tax without increasing the cost to the consumer.
The general coordinator of the Single Federation of Petroleum Workers (FUP), Deyvid Bacelar, ratified that the solution for fuel prices in Brazil lies in changes in Petrobras’ pricing policy. “The need to reformulate the PPI (import parity price) is crucial, as per President Lula’s campaign promise,” he said.
meeting day
The president of Petrobras, former senator Jean Paul Prates (PT), was one of those who met with Lula this Monday to discuss fuel exemptions. In addition to Prates, the Minister of Finance, Fernando Haddad (PT), and the Minister of Civil Affairs, Rui Costa, also visited the Planalto Palace.
They gathered in the morning. According to Haddad, the conversation between everyone was good, but the final decision on the subject has not yet been taken at that time.
During the afternoon, the issue of fuel was also studied by the Ministry of Mines and Energy. Also in the afternoon, the executive secretary of the Ministry of Finance, Gabriel Galípolo, was in a meeting with Petrobras’ board of directors.
Editing: Rodrigo Durão Coelho
